Questions & Answers:
Below are the questions submitted during the live webinar, along with the answers provided by Stacy H. Barrow. If you have questions of your own or require further information regarding Are You Ready for ACA Reporting, feel free to contact Marathas, Barrow & Weatherhead (see contact information to the left).
As for determining full-time or FTE employees...we have restaurants in which the employee is hired as Part-time, but per the ACA rules is considered FT for some of the 12 months. What would we consider this employee FT or PT? We are questioning as to whether they are to receive a 1095-C or not.
The ACA anticipates this situation where employee hours fluctuate from month to month, and they offer employees to use the “look back” method to determine full-time status. At the time of hire, based on the employer’s reasonable expectations with respect to the employee that they are hiring, if it is unclear to the employer whether that employee will average 30 hours per week over his first 12 months of employment, the employer can use the “initial measurement period” and measure that part-time employee for his first year of employment. There will be some months that will be under 30 hours per week on average, and some months where he is averaging more than 30 hours per week. As long as he averages 30 hours week over the 12-month measurement period, he would be offered coverage at the end, and the employer would not be penalized during those first 12 months when the employee worked full time. As an example, say you hire an employee today, and you’re going to measure them during their first 12 months of their employment. They are not going to receive a 1095-C for this year because they are going to be not an employee (Jan-Apr) or be in their initial measurement period (Apr-Dec). So they will not be reported on in 2016. In 2017, during that initial measurement period, that employee may have averaged 30 hours per week, so he will be treated as full time and receive a 1095-C for 2017 because he was considered full time for part of the year. If he didn’t average 30 hours per week during the initial measurement period, he would not receive a 1095-C for 2017 because he was either in the initial measurement period, or not a full-time employee during the remainder of the year.
What exactly do you consider a Control Group? What percentage of ownership does an owner need in the companies for them to be considered a controlled group?
The control group rules are among the most complex rules in tax code, and they are often the most misunderstood. We always require a direct attorney-client relationship when advising on control group issues. However, I will say that it is the same analysis that you may have done for your 401K plan.
To clarify on line 14, 1G -- examples might be a COBRA enrollee or non-employee director, yes?
Yes. It would be a COBRA enrollee in the year following termination. You can’t use 1G if the employee was full time at any time during the year. To clarify, you would only ever use 1G if you have a self-insured plan, and you would use it during the year following termination or the year following retirement. So if someone terminates in 2016, you could use 1G in 2017 if they had COBRA under a self-insured plan in 2017.
We are a nursing home. Do we need to do the electronic reporting for my entire staff.
No, since it applies to staff only. For example, facility maintenance would not be counted in the PBJ report.
We do not charge for employee only coverage $0. We have been told to 1E or 1A can be used?
Yes, that is generally correct, though there are other requirements to use those codes. The hardest one to meet is the cost requirement. So when you don’t charge anything for single coverage, it is very likely that you can use code 1A or 1E. You just have to make sure you offering full family coverage and that you are doing it for all months of the year in which a penalty could occur. Generally speaking, if you are paying for 100% of coverage, you can use 1A or 1E.